Social Security Is Bankrupt Now, Not In 25 Years

Real Clear Markets ^ | 08/10/2010 | Bill Frezza

[SeekAndFind]

This just in from the trustees that issue the annual report on the health of those two pillars of the modern entitlement state: Medicare and Social Security. For the first time in its history the Social Security program will pay out more money than it takes in. This watershed event will occur this year, to the tune of $41 Billion dollars. Under any rational accounting standards this makes the Social Security program bankrupt. And that's right now, not in 25 years when the so-called Trust Fund becomes insolvent.

You see, most pension programs hold income producing assets in their Trust Funds. Stocks, bonds, real estate, oil and gas partnerships, that sort of thing. A fully funded pension program owns enough of those assets to pay its liabilities even if the company closes its doors and not a penny more of new money comes in from current employees.

Social Security plays by a different set of rules enshrined under the New Deal and Great Society programs. These are the same rules that landed Bernie Madoff in jail. Although the Social Security system has been regularly taking in billions for decades and socking it into its Trust Fund just like a normal pension plan, Congress has just as regularly been draining the money out for current spending. All of the money collected from every American's paycheck throughout all of our careers is now gone. In its place are not stocks, bonds, real estate, and oil and gas partnership. In its place are IOUs from Harry Reid, Nancy Pelosi, Charlie Rangel, and Barney Frank. $2.5 Trillion dollars worth of IOUs.

[SeekAndFind]

Now, imagine if a private company had a pension plan that its executives had completely drained wining and dining Congressmen in return for IOUs. What do you think would become of those executives when word got out that the only way they could make pension payments was to beg a flat-broke Congress for money?

Tar and feathers come to mind.

So after years of telling us this problem is decades away the fateful day has finally arrived when Congress has to make good on that giant pile of IOUs. The same Congress that just massively expanded "access" to healthcare for all Americans regardless of their ability to pay. The same Congress that bailed out Fannie Mae, Freddie Mac, General Motors, and AIG. The same Congress that can't resist festooning every spending bill with earmarks for essential programs like butterfly gardens. And all of this right in the middle of the worst economic downturn since the Great Depression

Wake up you little princess and princesses. It's time to face the music.

[television is just wrong]

we want our payroll witholdings reimbursed

[paul51]

Although the Social Security system has been regularly taking in billions for decades and socking it into its Trust Fund just like a normal pension plan, Congress has just as regularly been draining the money out for current spending. All of the money collected from every American's paycheck throughout all of our careers is now gone

This is why the system is bankrupt today

[Le Chien Rouge]

Coming soon:

The federal government will ‘confiscate’ 401k’s and IRA’s in the name of ‘saving’ that Ponzi scheme called social security.

The media will trot out some poor elderly folk(who the government will plan to offer ‘death with dignity’ anyway) and state loudly: We must save social security for grandma safety.

[Shermy]

“Under any rational accounting standards this makes the Social Security program bankrupt. And that’s right now, not in 25 years when the so-called Trust Fund becomes insolvent.”

Then, under any “rational” standard, all the programs like Defense, Transportation, everything that has been sucking up Social Security payments, has been “bankrupt” for over 30 years?

Why all the hooha about Social Security being one penny in the deficit? Oh, right, pension raiding SS in order to fund big ticket people who kick back campaign contributions, that’s the ticket.

[Don Corleone]

Has anyone else noticed that their ‘direct deposit’ checks are coming in a couple of days later?

[Gator113]

To hell with tar and feathers....

Hang—Them—All

[Clint Williams]

It's not just Social Security that's bankrupt; it's Congress.

Hang them all.

Now.

[Carl Vehse]

"Tar and feathers come to mind."

For giving aid and comfort to the enemy in driving this country to bankruptcy, the traitorous current and former members of Congress need to be charged, tried, convicted, and sentenced to a more neck-stretching form of justice.

We might even pay back a significant portion of the national debt by auctioning off the honor of getting to officially carry out the sentence on individual traitors.

[Jeff Winston]

To hell with tar and feathers....

Hang—Them—All

Why do you make it sound like we're forced to make what would undoubtedly be a painfully difficult choice?

[Gator113]

“How much longer the American people are going to let the lunatics run the asylum remains to be seen. But the longer it takes to throw the bums out the tighter we are going to have to cinch our belts to dig out of this hole. At least for those of us that don’t depart for better climes.”

To that I say........

From the Declaration of Independence: “ — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, ....”

[Skepolitic]

This is not news ... from an actuarial standpoint, Social Security has been bankrupt since inception ... just like every other Ponzi scheme.

[CommieCutter]

That’s what I find interesting.

We were told for the last ten years privatization would not work in regards to SS. Now, they are considering stealing PRIVATIZED ACCOUNTS for a program that they didn’t want involved in privatization.

I would rather cash out, take the penalty, then live trailer-park rich for a few months rather than have it confiscated.

I made the CHOICE to have a portion of my check held back in my accounts.
What ever happened to the freedom to choose? Oh that’s right... it’s only okay when slaughtering a child.

[Gator113]

Because we are being forced to make such a choice.

Pray that November works.

[Jeff Winston]

Because we are being forced to make such a choice.

It's a false dichotomy! Why can't we do BOTH?

[Myrddin]

Congress has been spending the "surplus" of social security tax revenue that wasn't paid out to recipients for most of the last 40 years. The early projections anticipated the "surplus" to be gone by 2018. The recession simply advanced that date by 8 years. It was an inevitable situation. The revenues no longer cover the distributions. The "slush fund" is gone. The politicians addicted to spending are going to be looking for something else to raid to fund their habit.

[Gator113]

Okay, now I get you. ;>)

Yes, lets do both, and then some.

[Skepolitic]

we want our payroll witholdings reimbursed

Forget about it. Your payroll withholdings were taxes paid just like any other federal tax.

See Helvering v. Davis, 301 US 619 (1937): "The proceeds of both [employee and employer FICA] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way." In other words, Congress can squander FICA taxes any way they want.

You have no binding legal entitlement to Social Security benefits or reimbursement.

See Flemming v. Nestor, 363 US 603 (1960): "entitlement to Social Security benefits is not a contractual right". Further, "Congress included in the original Act, and [363 U.S. 603, 611] has since retained, a clause expressly reserving to it '[t]he right to alter, amend, or repeal any provision' of the Act. 1104, 49 Stat. 648, 42 U.S.C. 1304." Finally, "Congress, of course, properly retained that power. It could repeal the Act so as to cease to operate its old-age insurance activities for the future."

In other words, the ruling class doesn't have to pay you squat regardless of how much you paid in FICA taxes. Your duty is to pay your taxes; their privilege is to spend it as they see fit.

[American Constitutionalist]

Folks, no wonder SSI is broke, where do you think they got the money to pay for programs like Aid to Africa for AIDS, and all the wasteful social programs ?
The so called " Lock Box " that Al Gore talked about in the 90s was a scam to make you feel that SSI was secure.

[VOA]

bump